Switching to long-term lets could not only help Airbnb owners establish a regular income following stringent new council legislation on holiday rentals, it could also bolster Edinburgh’s depleted housing stock, according to the city’s leading letting agent Clan Gordon.
The latest Citylets quarterly market report for 2022 focuses on fresh challenges for the capital’s private rented sector with the introduction of two new laws significantly impacting landlords and fast rising rents due to a property shortage.
New Laws for short-term letting in Edinburgh and beyond
Those operating short-term lets must sign up to a new local council register. The deadline to apply for the licensing scheme, which was originally set for April 1 2023, has been delayed by six months to October 1, due to the cost-of-living crisis.
Property owners must also make a planning application for change of use and meet stringent safety regulations that exceed those required for long-term lets.
And a new emergency Scottish government Bill puts a cap on rent rises in the private and social sectors until the end of March 2023 and makes evictions unlawful in most cases for the same period.
The Cost of Living (Tenant Protection) Bill is designed to protect tenants during the current cost-of-living crisis while also safeguarding landlords who may be impacted by the financial crisis, but it has been met with criticism by many leading landlord organisations who believe it was hastily pushed through.
Edinburgh rents at an all-time high
Rents in Edinburgh are at an all-time high, with two-bedroom properties increasing by more than 17% year-on-year to September and almost all one and two-bedroom homes taking only a month to let. The average length of time to let a property is just 15 days and the average rent is £1327.
The return of students has put pressure on the rental market and Edinburgh was recently named the best city in the world to live by Time Out, putting even more demand on an already stretched market.
The situation is likely to become more challenging in the current financial crisis, with lenders retracting mortgage products and interest rates rising. Those who were looking to buy may be reticent due to the instability of the market, putting even more demand on rental properties.
So what’s the best way for landlords to achieve a regular, stable income in the current climate?
Long-Term Letting In Edinburgh Offers Long-Term Stability
Clan Gordon’s managing director Jonathan Gordon said: “Adverts in Edinburgh continue to attract what seems to be unlimited enquiries from many desperate people looking to secure a home. Whilst the new licensing regulations launched on 1 October for short-term lets in Edinburgh are onerous for those investors serving tourists, there is a great opportunity for investors to switch to long-term letting for stable, good yields, perhaps less hassle and if many do this, it will hopefully alleviate some of the supply issues in rented homes.”
The new Cost of Living Bill allows landlords to increase rents for new tenancies so setting a realistic figure now and finding tenants who are looking to make a long-term commitment is a wise move.
Property Management Service
Clan Gordon has been looking after rental properties for Edinburgh landlords for more than 15 years and offers a full management service for those who want to switch or who don’t want the hassle of managing tenants themselves.
We can advise on renovations and coordinate any work to ensure your property meets our high standards. Schedule a call now with one of our expert property management advisors.